Aerosoles Shoe Chain Seeking Buyer or Partner

The private-equity owner of the Aerosoles shoe chain is seeking a buyer or strategic partner for the company it created about 25 years ago from a cast-off unit of Kenneth Cole Productions Inc.

“We’re looking for a partner to replace a group that has been with the company for 25 years,” said Richard Irwin of Grumman Hill Group LLC, owner of the retailer known for women’s “comfort shoes” ranging from heels to ballet flats to boots.

A main challenge for the Edison, N.J.-based retailer lately is grappling with wage inflation in China, where its shoes are made, according to people familiar with the company. Aerosoles is hoping to find a buyer who can help it navigate the manufacturing environment in China to reduce its wage costs and help it with logistics, one of the people said.

Grumman Hill last year hired Boston-based mergers and acquisitions firm Consensus Advisors LLC to seek a buyer or a partner that will work with the retailer’s current management team, including Chief Executive Jules Schneider, said Mr. Irwin. “It has to be an arrangement he’s comfortable with” Mr. Irwin said.

Meanwhile, Grumman’s partners are mostly retired and seek to sell their interest in the business, said Mr. Irwin, who is 78. “If I was 50 I’d stick around for another 25 years,” he said.

Consensus has reached out selectively to several private-equity firms and other companies with experience in retail and the shoe business and has shown them Aerosoles’s books, the people said.

Based in Greenwich, Conn., Grumman Hill managed private-equity funds in the 1980s and 1990s, but in recent years has only invested its own money along with that of some wealthy families.

Grumman Hill in 1987 acquired Kenneth Cole’s teen-aimed What’s What label for less than $10 million and, along with its manager Mr. Schneider, used it as a platform to launch Aerosoles, Mr. Irwin said. Eventually, Grumman’s investors were repaid on the buyout, and Grumman and Aerosoles management have been content to let the retailer grow as a closely held concern, Mr. Irwin said.

Aerosoles employs about 1,000 people, has 127 U.S. stores and outlets as well as stores and shops-within-shops in 15 other countries, including China, India, Israel and Spain, according to the company and a person familiar with it. The company has annual sales of about $200 million, according to people familiar with it.

The company’s shoes are geared toward entry-level career women up to women in their 70s. Its price points and aesthetics put it in a category competing against the likes of Brown Shoe Co.’s Naturalizer and the Jones Group Inc.’s Easy Spirit.